We’ve spent the past few days reviewing the facts and fiction and state of play for legal sports betting in the United States: how much or how little people gamble, how the integrity of the game is monitored, and how well or poorly bettors are treated.
We wrote a lot. And, if anything, it’s impressed upon you that while everything isn’t perfect, better is always possible. That’s partly why sports betting was legalized and regulated to begin with, to grant a degree of control over an industry that was already doing brisk business.
So if better is possible, what does that look like? We at Covers have a few suggestions, and we thought a “Wish List” would be a good way to close the loop on The True State of Sports Betting.
Here are the coins that we (Ryan Butler and Geoff Zochodne) are throwing in the regulatory fountain:
Free bet caps
A restriction that sounds counterintuitive (why stop a business from giving out freebies?) could be one of the best ways to stop losing “whales” from betting irresponsibly. Academic studies show “free” bets are the best way to attract bettors – and the best way to keep them betting. Sometimes this leads to irresponsible gambling. There should be regulations that limit yearly free bet giveaways to, at most, several thousand dollars a year. This in no way hinders sportsbooks from attracting new customers (the biggest sign-up free bet promotions are now usually less than $1,000), and still gives them plenty of promotional opportunities for returning customers. – Ryan Butler
Better (and bettor) representation
When regulators are discussing what to do about the latest pain point in the sports betting industry, they are often talking amongst themselves, staffers, and operators. While bettors can and do write in when they’re able, they don’t have a mandatory seat at the table, and they should.
As many regulators and lawmakers are fond of saying, they don’t gamble. That’s fair. However, we’re talking about the gambling industry here, and hearing from gamblers – the customer, the consumer, the user – should be table stakes. Whether that’s an appointment to the regulatory body itself, or someone the regulator taps to provide regular feedback, it needs to happen. Otherwise, regulators are just hearing from one side of the counter, even if that side relays what it says it’s hearing from bettors. Nevertheless, a designated consumer advocate not only gives bettors someone they can turn to with their gripes, which can then be passed on to regulators, but it also makes certain that the customer is never forgotten. – Geoff Zochodne
(1/2) 2024 brought a wave of pieces criticizing regulated sports betting. Most cities one (or more) of three comprehensive academic studies. The @Covers team reviewed these studies (along with polls, financial data and dozens of other documents) to get a better picture
— Ryan Butler (@ButlerBets) February 3, 2025
Deposit limits tied to income disclosure
Sportsbooks should have monthly and/or yearly deposit limits. This is (and would be) opposed by the industry but there’s a compromise that allows big bettors (the books’ best customers) to continue betting as long as they can afford it. The standard deposit limit should be $25,000 annually (averaging a little more than $2,000 a month). That limit captures the vast majority of bettors. For those who want to exceed the limit, they must submit paystubs or other asset indicators. From there, the limit can be up to 15% of their annual income. This still allows the highest spenders to wager big amounts but creates a check on potentially reckless gambling. – RB
Integrity monitoring alerts should be public
I don’t think we should be waiting until months after some suspicious wagering is detected before the public knows about it. Get it out there as early and often as possible to alert the wagering masses that there is a cloud over certain betting markets, allowing them to steer clear if they so choose. It would also act as a way of deterring funny business. Though I’m sure there are good reasons why this doesn’t happen now (such as not alerting the suspects), some bettors are already reading between the lines when odds shift in certain ways or disappear altogether. Sometimes they are misreading as well. -– GZ
"Cool down" button
Many sportsbooks and their regulatory bodies allow self exclusion options, usually for months, years or permanently. These can be difficult to find. Instead, sportsbooks should have “cool down buttons,” easy-to-find displays that allow bettors to quickly “suspend” themselves for as little as an hour or for longer stretches. This can also be automated to block a bettor each day during a certain time; studies show nighttime betting can lead to more reckless wagering habits. This can help prevent bettors from gambling “on tilt” if they’re emotional after losing. – RB
California Sen. Adam Schiff used part of his five alloted minitues for questions to ask the panel during today's Senate hearing about limiting winning bettors. The respondents did not address the issue.
— Ryan Butler (@ButlerBets) December 17, 2024
We need the limiting data
If the limiting of sports bettors isn’t a big problem, let’s get the data and make it public. It’s a topic of endless discussion in #gamblingtwitter circles, but we still don’t have our arms around the size of the issue. If it’s smaller than expected, regulators can calibrate their efforts accordingly. If it’s bigger than expected, then they recalibrate accordingly. The Massachusetts Gaming Commission is already asking for such data, and other regulators should do the same. Then, make the numbers public and tap on them whenever new complaints and concerns inevitably arise. – GZ
Odds-to-probability toggle
Betting language is difficult to understand. Many who can interpret the “vig” on a -110 point spread bet don’t realize or translate that to an implied 52.38% probability. Sportsbooks should offer a way to toggle (or simultaneously display) both standard American odds and the probability. Bettors love their long-shot parlays, but it’d be better if they had a better concept of just how unlikely those events are from occurring. – RB
It’s time to teach sports betting literacy
Schools have begun teaching students a degree of financial literacy before they graduate, giving pupils a heads-up on the drudgery that awaits them in adulthood. It’s time to start doing the same with sports betting and perhaps gambling writ large. If we are living in a world with widespread legal gambling, we are going to have to brace people. This could also help with the harassment hurled the way of athletes.
If bettors are well aware of the variance that could befall them with any given wager, they could be less likely to take it out on who they’ve wagered on or against. Moreover, it could help with setting a budget for betting, managing one’s bankroll, and understanding betting markets. It’s a new world, and we should be better preparing people for it, whether through the schools, through regulatory advertising, or via marketing done by operators and required as a condition of their license. Or maybe all of that! – GZ
Easy-display win/loss statement
Many sportsbooks, specifically U.S. market leaders FanDuel and DraftKings, deserve credit for voluntarily making this information more readily accessible. All sportsbooks should be required to follow suit. This gives bettors a clearer understanding of just how much money they’ve lost gambling so they can budget appropriately going forward. – RB
The new CFTC needs to put its foot down
Prediction markets are the new hotness, and it doesn’t look like there are firm boundaries anymore for what event contracts can or should be offered to traders. That is partly because of uncertainty about what the courts have said, but also because of the change in leadership at the U.S. Commodity Futures Trading Commission (CFTC), which oversees Kalshi and other event contract providers. Acting CFTC chairman Caroline Pham has already announced a series of public roundtables that will touch on prediction markets, but firmer guidance from the regulator is needed.
Is it kosher that people are betting on the Super Bowl using Kalshi, despite the CFTC’s longstanding objection to “gaming”-related contracts? It presents a new form of competition for state-regulated sportsbooks, and clarity would help those operators and those that oversee them. While Robinhood recently said it got pushback from the regulator, no official stance has been taken and sports event contracts are still being traded. A clear stance must be taken. – GZ
The CFTC says it has spotted "several key obstacles to balanced regulation of prediction markets," but the list that follows suggests they have instead identified "a boatload of stuff." pic.twitter.com/b4USEgJi0R
— Geoff Zochodne (@GeoffZochodne) February 6, 2025
Federalize the hot line
1-800-Gambler is already a strong resource. Congress should require this be the single go-to number for anyone in America struggling with gambling. The current state-by-state offerings confuse bettors away from the resource. All existing state-level programs should be funneled under the 1-800-Gambler umbrella. There should also be dedicated funding, potentially from the existing sports betting excise tax. With many states only offering limited problem gambling funding, are threatening to curtail that funding, there should be a reliable, dedicated nationwide offering. – RB
FanDuel controlled almost 40% of the sports betting market in VA, followed by DraftKings at about 29%. BetMGM was a distant third at approximately 11%. pic.twitter.com/f9eli18BUP
— Geoff Zochodne (@GeoffZochodne) January 14, 2025
Tax rates need more flexibility
We have been losing books over the past few years and the options for bettors continue to narrow. Part of that has to do with the competitiveness of the sports betting biz, but some of it has to do with the fact that smaller operators can’t even make a small profit they’re happy with because of the cost of entry. Without those upstarts, players are missing out on innovation and alternatives, such as books that use the high-volume-lower-margin model that permits bigger bets. If tax rates are right-sized to let in a few minnows, yet kept competitive enough for larger players, you could have a more fulsome market. And that, of course, is key to keeping players in the regulated market altogether, rather than searching out unregulated operators because they offer something that’s not being offered in a certain state. – GZ
Part I – Negative Effects of Gambling Legalization Overblown
Part II – The Average American Sports Bettor Gambles Infrequently
Part III – Gambling Isn't Ruining the Game
Part IV – Whither the Winners?
Part V – Legal Sportsbooks Offer Protections Against Corruption
Part VI – Wish List
